Hello mtg. gurus. What would you suggest in the way of reduced closing costs and APR? What can I do to get a great mtg? I have found a way to get rid of FHA financing on my mtg. Are there any other things?

2 Responses to "How can i reduce closing costs while refinancing my mortgage with good credit?"

The biggest thing to remember is to compare apples to apples. For example: If you like the rate that is being quoted to you by one lender – then shop the fees of another lender based on that rate. OR if you like the closing costs quoted by one lender – shop the rate based on the closing costs you have in front of you.

For Example:

“Hello, this is (your name). I’m being offered a rate of 5.000% (always use 3 digits). What would your closing costs be at that rate?” No matter what – don’t tell that lender what closing costs you were quoted. Honest lenders/brokers give their best quotes the first time.

OR

“Hello this is (your name). I’m being offered a loan with $4000.00 in closing costs. What is the best rate that you can give me without going over that amount. In this example don’t tell the competing lender the rate that you already have.

*EDIT: when comparing closing costs it’s best to get a Good Faith Estimate so that you can compare the quote line by line.

After checking with Local Bank, Credit Union, and a local broker – choose the one with the lowest rate/fee combination that you like. From there you can attempt to negotiate more, but you will have the lowest quote to start from.

A 5% loan today would cost $8,000 in “fees”.
A 5.5% loan would cost $3,000 in fees.
A 6% loan would be $1,000.
A 6.25% loan would be “no cost”.
A 6.5% loan would include a new GE frig/washer/dryer (this is a promotion run by some mortgage companies) and cost nothing.

You get to choose. You can have any APR that you want. You can decide how much you will pay in fees. But no banks are giving away money; they are smart. Don’t worry about getting rid of FHA unless you are able to get your loan down to 80% of the appraised amount..